Ever since 1971 the United States has had the ability to supplement tax revenues by accessing an endless supply of money via the Federal Reserve. This ever increasing supply of money causes inflation. The historical and forecasting data below demonstrates how drastically the price of gold has been impacted due to inflation. Gold is the most stable asset in existence. The purchasing power of gold does not fluctuate over the years. It is the purchasing power of the dollar that fluctuates.
Year Gold $/ozt
---- -----------
1800 20.65
1850 20.65
1900 20.68
1930 20.65
1933 --> confiscation of privately owned gold
1940 33.85
1960 35.27
1970 35.94
1971 --> removal of the gold standard
1980 612.56
1990 383.51
2000 279.11
2005 444.74
2010 1,224.53
@ 12.08% based from 1971
2015 2,352.95
2020 4,161.84
2030 13,020.57
2040 40,735.65
2050 127,444.02
@ 20.58% based from 2005
2015 3,152.06
2020 8,035.18
2030 52,215.11
2040 339,310.27
2050 2,204,945.18
Prior to the removal of the gold standard in 1971, the price stayed very consistent. However, after the removal, the monetary system lost stability and has been undergoing large amounts of inflation. As you can see, the years ahead nearly guarantee more inflation and higher prices of gold. This is the reason why gold has always been considered one of the best hedges against inflationary fiat currencies.
